Behavioral Difficulties

Although they don’t dampen sales, the 1 provocative window displays of Victoria’s Secret engender periodic protests from mall patrons. The racy campaign that has made the brand a cultural phenomenon is a bit of a double-edged sword that needs to be carefully managed. For instance, in less-aware times, the retailer would carry its sexy images of winged glamazons onto the sales floor. Not today.

Retailers are discovering that, like human nature, the store experience just isn’t that simple. It’s tied to the needs and occasions that drive today’s fragmented shopper. Most businesses still strategize around the external consumer mind-set, unaware that it changes inside the store—at the point where the passive consumer becomes an active shopper ready to make the purchase decision. In the case of Victoria’s Secret, sexy graphics made some shoppers feel uncomfortable. Who knew?

More retailers are taking a page from the consumer-packaged-goods playbook, and investing in behavioral research. Ethnography in combination with newer methods helps discover opportunities to inform and influence shoppers along the decision-making path. It takes into account that the same person can exhibit different behaviors depending on need. A shopper may need to feel like a good mom or a stylish individual. The store can address those needs—and help solve problems around the occasion. Does the shopper have leisure time today? Or is she rushed, with kids in tow? These considerations can even be broken down according to segments to find where groups overlap or differ. The resulting insights can be integrated into the store design.

As an industry, retail has largely overlooked the advantage of combining research and modeling as a way to gauge conditions for new-store concepts before rolling them out. The same algorithmic power that drives e-commerce makes it possible to subject the market unknowns of a store prototype to simulation, to test the scenario and mitigate risk. After research showed too much customer confusion, Walgreens announced its plans to reduce the number of items it carries. It is also considering opening smaller stores to reduce clutter and enhance value.

Customer-centricity—truly understanding the customers and revolving every business decision around them—is one aspect of retail that is not changing rapidly. The majority of retailers are still driven by the complexities of running a business or pleasing their share holders. This seems oddly backward in such a fast-moving industry.

The use of market sciences can help a siloed and stodgy business make a case for creative change and deliver the shopper insights that can help it achieve the ongoing retail goals of bigger baskets, more frequent trips and increased loyalty. Knowing the customer better helps businesses develop fresh relevant ideas, improve the customer experience and, thus, store productivity.